Healthcare Business News

Spending varied widely in early ACO test, report says

By Melanie Evans
Posted: September 11, 2012 - 4:45 pm ET

Medicare spending varied widely among 10 physician groups that tested accountable care ahead of healthcare reform, with the most notable reductions among low-income, medically complex seniors, a newly published estimate shows.

On average, Medicare spending for low-income seniors also covered by Medicaid, a population known as dual eligibles, declined by $532 annually for elderly patients included in the five-year accountable care pilot, according to a report published in the Journal of the American Medical Association.

For seniors who were enrolled in the pilot without Medicaid coverage, Medicare spending declined by $59 annually, on average, according to a team of researchers with the Dartmouth Institute for Health Policy and Clinical Practice.

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The researchers compared Medicare spending, emergency room use and 30-day readmissions to the hospital for the years before and after the start of the Physician Group Practice Demonstration, which is considered a precursor to accountable care under the Patient Protection and Affordable Care Act.

Researchers approximated methodology used by the CMS to measure performance of the 10 medical groups in the demonstration, which ended in 2010 after five years. The researchers used an alternative method to risk-adjust the estimates.

The 10 medical groups are: the Billings (Mont.) Clinic; Dartmouth-Hitchcock Clinic, Bedford, N.H.; Everett (Wash.) Clinic, Forsyth Medical Center, Winston-Salem, N.C.; Geisinger Health System, Danville, Pa.; Marshfield (Wis.) Clinic; Middlesex Health System, Middletown, Conn; Park Nicollet Health Service, St. Louis Park, Minn.; St. John's Health System, Springfield, Mo.; and the University of Michigan Faculty Group Practice, Ann Arbor.

The changes in spending ranged from annual savings per senior of $2,400 at the University of Michigan to an annual spending increase of $598 per senior at Middlesex.

The study found dual-eligible patients enrolled in the accountable care experiment were less likely than other seniors to return to the hospital within 30 days of leaving.

Among the dual-eligible seniors, the savings were largely a result of reduced hospital stays.

Carrie Colla, an assistant professor at the Dartmouth Institute and lead author of the study, said the results provide new information that shows vulnerable populations could benefit from efforts to overhaul healthcare incentives to promote quality and reduce costs.

The 10 medical groups in 2011 entered into a two-year extension of the demonstration. In 2012, Dartmouth-Hitchcock, Park Nicollet and the University of Michigan left the demonstration to join Medicare's Pioneer ACO program and Everett Clinic dropped out.

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